Barclays downgrades the large-cap E&P sector to Negative from Neutral and the small- and mid-cap E&P group to Negative from Positive, arguing that downside risk outweigh potential gains even if oil prices recover.

Equity investors are pricing in WTI crude assumptions of close to $75/bbl in 2016 compared to current strip prices of ~$57, Barclays says, also noting that an abundance of relatively cheap oil supply from U.S. producers could further delay a price recovery.

At the same time, Barclays picked a few favorites, upgrading Range Resources (NYSE:RRC) to Overweight from Equal Weight, and maintained Overweight ratings on large-cap E&P companies CNQ, EOG and NBL; among small- and mid-cap E&P names, the firm favors AR, CXO and XEC.

Kosmos Energy (KOS+6.8%) is upgraded to Outperform from Sector Perform with a $17.50 price target, up from $12, at RBC Capital after its recent Q3 earnings beat.

RBC says KOS offers a rare combination of reserves, production, cash flow and a high-risk high-reward drilling campaign, which should lure investors that have been put off international E&P by a dearth of exploration success and weak oil prices.

Kosmos Energy (NYSE:KOS) -4.1% AH after announcing that funds affiliated with Blackstone Group and Warburg Pincus will sell a total of 15M KOS common shares in a public offering; the underwriter is granted an option to purchase up to an additional 2.25M shares from the selling shareholders.

KOS reportedly has committed to drill two exploration wells up to a total value of $240M, and will then drill a third well, or alternatively a first appraisal well, to a value of another $120M; KOS has also committed as the new operator to undertake a 3D seismic survey of ~7K sq. km over the two blocks.

KOS already is present in the region as a shareholder in Ghana's Jubilee oil field and TEN project.